Why Broadband is a Linchpin of a Sustainable Global Economy

Why Broadband is a Linchpin of a Sustainable Global Economy

Investing in broadband to develop robust and high speed communications networks will help grow the world's economy without also growing greenhouse gas emissions.

But we need to acknowledge the urgency of the situation in which we find ourselves today. Greenhouse gas emissions grew to the highest output in history in 2010, the International Energy Agency (IEA) recently announced. As a result, there is an urgency to invest in technology that can produce innovative breakthroughs that can be scaled across industry sectors in the shortest possible time. A range of technologies will play a crucial role in the transition to a successful growing economy where economic growth is de-linked from growth in greenhouse gas emissions.

Broadband is one such example, the Carbon Disclosure Project found in its new paper, "Building a 21st Century Communications Economy." Broadband can cut greenhouse gas emissions, accelerate economic growth and create jobs. There is significant evidence to prove this.

The Republic of Korea illustrates this point. The country's economic growth is heralded the world over. Starting with a per capita income of less than $100 in 1960, Korea averaged an economic growth rate of 8 percent a year for the next four decades. In 2011, it reached $21,210 (PDF).

How did they do it? There is significant evidence that increased use of broadband technology was central to achieving its recent growth. The government has taken an extremely proactive approach to broadband coverage: Access grew from less than one Internet user per 100 people in 1995 to one of the world's most highly penetrated markets today.

But the challenge is about more than just economic growth. It is about climate change and the competition for resources. On December 18, 2007, the Financial Times columnist Martin Wolf wrote: "The biggest point about debates on climate change and energy supply is that they bring back the question of limits. If, for example, the entire planet emitted CO2 at the rate the U.S. does today, global emissions would be almost five times greater. This is why climate change and energy security are such geopolitically significant issues. For if there are limits to emissions, there may also be limits to growth. But if there are indeed limits to growth, the political underpinnings of our world fall apart."

So it seems we are grappling with a very serious issue. It is not just climate change that threatens to limit growth. Increasing scarcity of affordable oil is driving up prices permanently, and competition for commodities of all kinds is heating up. Global oil demand is projected to grow on average by more than 20 million barrels a day by 2030. This increase is more than twice Saudi Arabia's production and equivalent to using the entire U.S. strategic oil reserve in a month (PDF).

We are at a historic moment where we will either enter into a contest for finite resources -- where most will lose in the long term -- or we can enter into a golden age of almost limitless economic growth, without the serious threat of climate change, built on the potential of communications.

The ICT sector shows many of the attributes that will help drive the economy towards a low carbon, high growth future. CDP calculations show that ICT companies have a high net income per metric ton of CO2 emitted, generating more than $4,000 per ton. This is almost double that of the consumer staples sector and seven times that of the materials sector. However, the greatest impact that ICT will have is by providing the technologies and services to companies across sectors to drive energy efficiencies and transform working practices, thereby increasing their net income per ton of CO2 and starting to decouple economic growth from emissions growth. The U.S. Addendum to the Smart 2020 report (PDF) showed that ICT could help the U.S. economy reduce emissions by an estimated 13 to 22 percent and see gross energy and fuel savings of $140 billion.

To realize these potential greenhouse gas savings, access to broadband is critical; if devices are not reliably connected to the network they will not be adopted. Broadband also encourages upstream investment in industries that are: creating new markets (e.g. eBay); taking existing markets online (e.g. e-books and newspapers); transforming an established market (e.g. online gaming); and combining existing markets (e.g. smartphones for calls, emails, social media and information gathering). There are huge commercial opportunities in freeing people from the very expensive and unproductive chore of traveling to offices each and every day. Remote working allows us to rebuild rural communities, save billions of dollars and massively reduce greenhouse gas emissions. The potential is as big as the train, car and airplane that have gone before.

Can we name the 21st Century as the Communications Century? The 19th Century saw massive advances in agriculture, and the 20th century was defined by manufacturing. Might humanity stand on the very edge of a great new age of 'dematerialized' economic growth, where you can grow economies while reducing carbon -- the classic win-win potential of transformative technology? Let us remember that education, entertainment, culture, art, science and all other forms of communications can grow without limit.